Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc. There are several methods of calculating the value of inventory in closing stock which are as below: FIFO method (First In First Out) is the most using method of inventory valuation . The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on. LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter. Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate. Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available. Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly. Requirement-1: To Calculate: In the given question we have to calculate the following details under perpetual inventory system: Cost of goods and quantity available for sale

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Answer 1

Question

Chapter 6, Problem 1BPSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

To determine

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

To determine

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

To determine

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

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Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600.Self-Employment tax =

Question 2 U. Richards does not keep his books on the double entry system. His bank summary amount for 2010 is as follows: Balance 1.1.2010 1890 Receipts from $44656 debtors Creditors Loan from U. Miller $2.000 Rates Rent Drawings Cash withdrawn from bank $540 0 Payment to Trade $316 95 2750 1316 3095 1642 Sundry Expense Records of cash paid were sundry $122, trade creditors $642. Cash sales amounted to cash drawings were $5289. The following information is also available: 31.12.201 31.12.2 0 011 Cash in hand $48 $93 Trade creditors $4896 $5091 Accounts Receivables 60 $71 13 32 Rent Owing $250 Rates in Advance $282 $312 Motor van (at valuation) 2800 2400 Stock 11163 13021 Required: A. Statement of Affairs. (to find opening capital as at 31.12.2010) B. Cash Account & Bank Account. C. Accounts Receivables & Accounts Payables Control A/Cs. D. Income Statement for the year ended 31 December 2011.

2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600. Self-Employment tax = $ 6,440.70 3: Elisa Grant earns net self-employment income of $198,000. She works a second job from which she receives FICA taxable earnings of $100,400. Self-Employment tax = $ 30,294.00

Answer 2

Question

Chapter 6, Problem 1BPSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

To determine

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

To determine

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

To determine

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 1BPSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

To determine

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

To determine

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

To determine

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 1BPSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

To determine

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

To determine

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

To determine

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 1BPSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

To determine

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

To determine

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

To determine

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Answer 6

Chapter 6, Problem 1BPSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Answer 7

Chapter 6, Problem 1BPSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Answer 8

To determine

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

Answer 9

To determine

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

Answer 10

To determine

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Answer 11

To determine

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Answer 12

To determine

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Answer 13

To determine

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 6 - Prob. 1DQ Ch. 6 - 2. Where is the amount of merchandise inventory...Ch. 6 - Prob. 3DQ Ch. 6 - Prob. 4DQ Ch. 6 - What does the full disclosure principle prescribe...Ch. 6 - Prob. 6DQ Ch. 6 - Prob. 7DQ Ch. 6 - Prob. 8DQ Ch. 6 - Prob. 9DQ Ch. 6 - What is the meaning of market as it is used in...

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Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Want to see the full answer?

Chapter 6 Solutions

Concept explainers

Videos

Requirement-2 To Calculate: We have to calculate units in closing stock at month end under perpetual inventory system.

Requirement-3: To calculate: We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-4: To calculate: We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Want to see the full answer?

Chapter 6 Solutions

Requirement-2

To Calculate:

We have to calculate units in closing stock at month end under perpetual inventory system.

Requirement-3:

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-4:

To calculate:

We have to calculate Gross profit under FIFO, LIFO, Weighted Average and Specific Identification method under perpetual inventory system.